Skip to content


Why Fewer Women Are Applying for Business Loans, and What to Do About It

The following article by Seedcopa Vice President & Relationship Manager Marie Shires was published in the most recent issue of PA Bankers Magazine.

As a banker, you’re well aware that there’s no shortage of female small business owners. While it would be ideal to see far more, women-owned businesses currently make up 39 percent of the 28 million small businesses operating across the United States, according to the 2018 Women’s Entrepreneurship Report from SCORE. And 61 percent of the clients that SCORE served last year were women.

In addition, the Kauffman Foundation reports that the number of women-owned businesses is growing at double the rate of male-owned businesses.

The problem is that as few as one in four female entrepreneurs apply for business financing, and when they do, they ask for substantially less than male business owners. This, plus the anecdotal experiences we can all share about working with excellent women entrepreneurs, prompts the question: Why do fewer women apply for financing to grow their businesses?


While the World War II poster of Rosie the Riveter saying “We Can Do It” may seem outdated, perhaps it’s not when it comes to women and business financing.

A survey by the National Association of Women Business Owners (NAWBO) shows women appear to be relying on themselves, rather than lenders, and they are likely to turn to personal sources of income. About half say they have relied on credit cards to better their businesses. Others site personal loans, personal collateral and personal guarantees.

In addition, a substantial portion of women surveyed were unfamiliar with Small Business Association (SBA) loans as a popular avenue for growing a small business. An astounding 65 percent said they were unfamiliar with SBA 504 loan programs as well as a suite of other SBA offerings, according to the NAWBO survey.


In a widely reported study conducted by Merrill Lynch, 61 percent of women said they would rather discuss the details of their own death than money. This may add to the evidence that many women were brought up to avoid talking about money, even inside their own homes. They may not feel comfortable or confident articulating their monetary needs to a stranger sitting across from them at the lending table.

And for women who finally do decide to take the leap and “make the ask,” a study by Fundera reveals that female entrepreneurs request roughly $35,000 less than men do.


As a commercial lender that works with banks to help small- to mid-sized businesses obtain government loans, Seedcopa is working with a woman right now who is reluctant to ask for the amount of money that she really needs to take her business to the next level. She is already a resounding success. In fact, the demand for her services is so great that she has outgrown the leased office space she occupies and can’t meet demand (or hire new employees to help her) unless she gets funding to purchase a larger space.

 So why did she hesitate to apply for financing? After much discussion, it was discovered she did not have a complete understanding of what she can afford.

This is not uncommon. There are many small business owners – men and women – who have little to no exposure to this type of financial skill. Many don’t have a full understanding of equity or the difference between cost of goods sold and an expense on their income statement. They may rely heavily on a QuickBooks program or friends to guide them.

But it appears the financial literacy gap is wider for women. A George Washington University study found that female college students are less enthusiastic about financial topics, less confident and less willing to acquire financial skills than male students. These differences have also been observed in high school students.


While it may take time for the gender gap to close as more and more women pursue careers in business, there are some essential strategies that both business women and lending partners can leverage now.

Easy-to-Share Financial Tools

When a banker encounters a business owner who could use support in financial skills, there’s not always enough time, staffing or bandwidth to fully assist. However, just taking the time to walk a borrower through their balance sheet can make an astounding difference and provide the support they’ve been seeking. For further assistance, a referral to a government loan specialist, the local SCORE or Small Business Development Center (SBDC) can benefit everyone involved and make the borrower feel secure in the value of their banking relationship with you. When you are a valuable resource, you are also a valuable lender.

Loans That Lead to Sound Business Plans

While bankers may view the government loan process as far more arduous than other options, to a borrower, the process can provide all of the right financial tools they’ve been seeking (but haven’t found) from competing financial institutions. When was the last time the borrower updated – or prepared – a business plan, mission statement or company vision? Do they have financial projections? Do they have enough working capital to take on a downturn or grow sales faster? These are financial essentials that can be tackled together, and with support from a government loan specialist, they become valued benefits instead of insurmountable obstacles.

Choosing a government loan specialist who both supports and eases your lending process is, of course, key. Here’s our insight: A good government loan specialist supports the project and moves it toward approval. A really good one detects any issues or concerns right off the top of the project, drawing from decades of government lending experience to know exactly what those red flags will be and working to resolve them immediately.

Growth & the Banker’s Perspective

According to the 2018 State of Women-Owned Businesses report by American Express, “there is a significant gap between the number of women who start businesses and those who commit to growing them.”

As a banker, you’ve encountered many business owners who are forced to learn the hard way that growing a business is key to the success of the business. And growth can come on unexpectedly and quickly. For instance, a smaller client gets an influx of cash and suddenly needs a massive amount of services; a product is suddenly in high demand due to changing market trends; a valuable referral results in a lot more work and potential profits.

You have seen these situations first hand, and know that a credit card or personal funds are a risky quick fix for what should be a long-term loan solution and commitment to the success of the business. Never forget the value of this perspective, and the reassuring service you provide when you reinforce it. When you actively share this insight —  drawn from the breadth of experience your borrower doesn’t have but certainly seeks — it can change the course of people’s businesses and their lives.

Questions We Must Ask Ourselves to Uncover Solutions

Do women perceive financial help as a sign of weakness when it comes to running a business? Are they trying to balance so much that there seems to be no time to go through the detailed process of obtaining a government loan? Is financial literacy a contributing issue? Is there a cultural as well as emotional component that’s influencing decisions? It only takes one of these factors to get off track. By recognizing them, we as loan partners can course-correct our current and younger generations of savvy business women on the path to entrepreneurial success. We can also tap into a market for economic growth that has been overlooked for far too long.

Marie Shires

Marie Shires is a vice president and relationship manager for Seedcopa + SeedcoDE, a private nonprofit company that works with lenders to help small to mid-sized businesses in Pennsylvania and Delaware obtain government loans. A native of Wyomissing, Marie can be reached at or 610-321-8245.

Back To Top